The most recent outburst of megamergers in the corporate world, followed as usual by layoffs to "improve the bottom line," seems to run counter to the rosy picture we are given about the economy in America as gauged by Wall Street. Of course, Wall Street is dominated by vast financial institutions and therefore looks at things differently than the average family does.
For instance, I found myself wondering the other night, while watching TV news, about certain discrepancies in the reporting of news about the economy. Pundits have been saying the strong showing by Democrats in the November elections was the result of widespread prosperity and record lows in the unemployment rate. Yet last week there was a different report -- that corporate mergers and cutbacks in recent days have resulted in the loss of a half-million jobs.
Sloppy reporting, I assume, is the reason we rarely get into depth about the seeming contradiction. Much of the "booming economy" is in the area of minimum-wage jobs in the service industries. The half-million unfortunates -- for now, at least -- are experienced production workers and midlevel executives who are sacrificed by the cost-choppers.
It's not difficult to doodle pictures of Scrooge around the reports that the recently merged Jefferson Smurfit Corp. is closing one of its area plants and laying off people in its Clayton headquarters, discharging hundreds of workers in the weeks before Christmas. It is harder to draw the faces of the new managerial class who make such decisions in the interests of stockholders, or of the chief executive of Venture Stores, who, after declaring the company's bankruptcy, was rewarded with $5 million in severance pay and bonuses. A bonus for what?
The world's economic system is in flux, of course, and it's of interest to note that we are well on our way back to the era of monopolistic business behemoths run by the robber barons of the early 1900s, which led to the antitrust laws of the '30s after the Great Depression set in. What is not so apparent is the changing nature of the American corporation as such.
No corporation has ever been nominated for the Nobel Peace Prize for promoting harmony, but even at their worst behavior, corporations were usually members of the local community and their owners normally identifiable as members of the local citizenry, often receiving plaques for service to their hometowns.
Today, their owners are "holding companies" or other anonymous structures without local ties and have abandoned any pretense of community responsibility. Their CEOs are hired managers from other places whose own fates (and futures) depend on the magic numbers of profit to shareholders.
So long as the society can reabsorb the victims of this new system -- and many of a certain age become lost in it -- it appears that the current corporate mentality will have its day, despite the fact that the rich become richer and working mothers in two-job families become more numerous, just to keep up with things.
But if the excesses of this new mentality lead to more crises like those in Japan and the Pacific Rim, and the American economy should falter to the point where large-scale unemployment results from it, history's notorious pendulum may spring back from "free markets" to a controlled economy, just to contain violence in the streets. And over it all, as in America's shattered economy with its own robber barons, may lurk the resurgence of once-popular notions such as state socialism, many vestiges of which are still with us.
One would think that, in this benign American era of virtual prosperity and freedom from want in the broad spectrum, the powers that be would hedge their bets. But the powers that be are faceless servants of the system itself -- or individuals becoming billionaires from stock market or executive privilege -- with little concern for history or movements. They are putting in their time until their own payoffs buy them out.
For now the politicians who make our laws are afraid to rock the golden boat. But what if it begins to take on water as the new millennium approaches? It will be interesting to see whether, by 2000, some presidential aspirant has the nerve to alert the country to the direction corporate America is taking.
And to see whether the voter contentment shown in the polls retains its rosy hue. But already, as '98 nears its close, there are ample signs that corporate America is consumed by the profit motive, in whose glow the future of workers and executives alike casts a warning shadow.